The Blues have been stung by UEFA sanctions after allegedly breaching Financial Fair Play regulations.
Those at the Etihad Stadium are planning to appeal that verdict and intend to grace European competition once again in 2020-21.
For now, though, questions are being asked of whether a key man can be retained if continental action does not form part of the schedule.
Raheem Sterling has hinted that he could be interested in a future move to Real Madrid, while Pep Guardiola is yet to commit to a contract extension.
McManaman concedes that exits may be on the cards if City are unable to get a suspension overturned, but he also expects the vast majority of top talent to stay put.
The former Blues winger told HorseRacing.net: “In terms of a potential exodus of players, I think that the majority of players will probably feel it is unjust and they will probably stick it out.
“Raheem Sterling has already come out in support of the club, and I’ve no doubt that others will also come out in support too.
“On the other hand, if the ban is upheld then City are going to have to start balancing their books, so something will have to change.
“If that’s the selling of one player here, or another player there. But I don’t think there will be a mass exodus of players.”
They are due to face the Blancos in the first leg of a last-16 showdown on Wednesday and McManaman expects the Blues to edge a meeting between two of his former clubs.
“Juventus on their day could produce something, but overall when you look right across the board, then you’d say the top two English teams are going to be the strongest in this tournament.”